Shafaq News
Oil prices inched down on Tuesday, extending losses from theprevious session, as investors looked for clearer signs of progress inrestoring crude flows through the Strait of Hormuz following U.S.-Iran peacetalks.
Brent crude futures fell 20 cents, or 0.3%, to $77.70 abarrel and U.S. West Texas Intermediate declined to $73.74 a barrel, down 12cents, or 0.2%, as of 0323 GMT.
Prices fell more than 3% on Monday after the United Statesgranted Iran a 60-day sanctions waiver following initial peace talks, and asofficials reported a lull in hostilities in Lebanon under the broader agreement.
"The gradual increase in oil flows through the Straitof Hormuz continues to weigh on the market," said ING analysts in a note.
Two crude tankers with just under 2 million barrels of oilsailed through the Strait of Hormuz on Monday, ship-tracking data showed, in asign that traffic was picking up following weaker flows on Sunday due toconcerns over passage through the waterway.
"Transits over recent days look to have risen sharply,(which) the market will treat as a proxy for both physical oil, perhaps paperoil, and diplomatic progress," said Sparta Commodities' head of researchNeil Crosby in a note."It feels like we will be stuck in this bearish risk-off/optimistic mooduntil such time as something changes."
The price declines come after a weekend that had appeared toput the week-old accord in jeopardy, including threats from U.S. PresidentDonald Trump to restart the war if Iran disrupted shipping through the Straitof Hormuz after Tehrandeclared the strategic waterway closed.
"There remains a prevailing dose of market scepticism,rooted in deep-seated mistrust between Washington and Tehran, suggesting thatany return to pre-war oil prices is likely to be delayed rather than immediate," said TimWaterer, chief market analyst at KCM Trade.
Separately, analysts in a Reuters poll expect U.S. crudeinventories to have fallen last week, along with distillate and gasolineinventories.
On Monday, government datashowed U.S. crude stocks in the Strategic Petroleum Reserve fell to 331.2million barrels last week, the lowest since June 1983, as supplies tightened inthe wake of the U.S.-Iran conflict.
(REUTERS)
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